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Jim Flaherty vows to intervene in housing market again if needed

Posted on Nov 22, 2013 in Mortgage Market Updates and News

Michael Babad
The Globe and Mail

Flaherty eyes housing

Canada’s finance minister says he’ll intervene in the housing market for a fifth time, if that's what's needed, to head off any bubble.

“We have to watch out for bubbles – always – in markets around the world, including our own Canadian residential real estate market, which I keep a sharp eye on,” Jim Flaherty said today in Edmonton, where he unveiled his fall economic and fiscal update, The Globe and Mail's Carrie Tait reports.

“And I’ve intervened four times in the last several years, and I’ll intervene again if I have to to make sure we don't create a housing bubble."

Mr. Flaherty’s latest move came in the summer of 2012, when he tightened mortgage insurance rules and deliberately sparked a slump in the residential real estate market.

The effect of that has faded, however, and, as The Globe and Mail’s Tara Perkins has reported, sales have rebounded, at least partly because of expectations of higher interest rates.

Canada’s housing market is seen by some groups as among the frothiest in the world, though most economists do not expect a U.S.-style meltdown.

Mr. Flaherty’s comments highlight the continuing concern among policy makers over the strength of Canada’s real estate market as families continue to juggle record debt burdens. Indeed, the Canadian Real Estate Association is expected later this week to report another month of strong home sales in October, somewhere in the area of 12 per cent.


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